TSQ or NFLX: Which Is the Better Value Stock Right Now?
Investors with an interest in Broadcast Radio and Television stocks have likely encountered both Townsquare Media (TSQ) and Netflix (NFLX). But which of these two stocks offers value investors a better bang for their buck right now? We'll need to take a closer look.
The best way to find great value stocks is to pair a strong Zacks Rank with an impressive grade in the Value category of our Style Scores system. The Zacks Rank is a proven strategy that targets companies with positive earnings estimate revision trends, while our Style Scores work to grade companies based on specific traits.
Townsquare Media has a Zacks Rank of #1 (Strong Buy), while Netflix has a Zacks Rank of #3 (Hold) right now. The Zacks Rank favors stocks that have recently seen positive revisions to their earnings estimates, so investors should rest assured that TSQ has an improving earnings outlook. But this is only part of the picture for value investors.
Value investors analyze a variety of traditional, tried-and-true metrics to help find companies that they believe are undervalued at their current share price levels.
Our Value category grades stocks based on a number of key metrics, including the tried-and-true P/E ratio, the P/S ratio, earnings yield, and cash flow per share, as well as a variety of other fundamentals that value investors frequently use.
TSQ currently has a forward P/E ratio of 3.78, while NFLX has a forward P/E of 24.18. We also note that TSQ has a PEG ratio of 0.32. This popular metric is similar to the widely-known P/E ratio, with the difference being that the PEG ratio also takes into account the company's expected earnings growth rate. NFLX currently has a PEG ratio of 1.69.
Another notable valuation metric for TSQ is its P/B ratio of 2.28. The P/B ratio pits a stock's market value against its book value, which is defined as total assets minus total liabilities. For comparison, NFLX has a P/B of 5.66.
Based on these metrics and many more, TSQ holds a Value grade of A, while NFLX has a Value grade of C.
TSQ is currently sporting an improving earnings outlook, which makes it stick out in our Zacks Rank model. And, based on the above valuation metrics, we feel that TSQ is likely the superior value option right now.
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Townsquare Media, Inc. (TSQ) : Free Stock Analysis Report
Netflix, Inc. (NFLX) : Free Stock Analysis Report
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